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Will upcoming HHS regs push hospitals closer to radical interoperability?
Health Care Current | August 20, 2019
This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies, and provides updates and insights on policy, regulatory, and legislative changes.
Will upcoming HHS regs push hospitals closer to radical interoperability?
By Steve Burrill, vice chairman, US health care leader, Deloitte LLP
As I meet with hospital and health system executives, I hear a good bit of confusion about the future of health. When I bring up the topic, people often think I’m talking about where health care is headed. Care is the process of managing and treating illness and healing injuries, and it is just one component of the future of health, which is a broad and transformative concept. The future of health, as defined in Forces of change: The future of health, is an innovative departure from what we have historically known as health care.
This future of health, however, likely can’t be achieved unless radically interoperable health data gives stakeholders the ability to access, mine, and share vast troves of patient data that give us new insight into prevention. In February, the US Department of Health and Human Services (HHS) Office of the National Coordinator for Health Information Technology (ONC) released proposed rules aimed at driving the US health care system toward greater interoperability of electronic health records (EHRs). We expect the administration will finalize these rules this fall—many of the provisions would go into effect on January 1 (see the July 2, 2019 My Take from my colleague, Anne Phelps).
The Deloitte Center for Health Solutions recently surveyed technology leaders from health systems and large health plans to determine how prepared they are for the anticipated regulations (we’ll publish the findings next month—make sure you are subscribed to access the full findings of the study, launching as a two-part series at the end of August and October). As I noted in my March My Take, some hospitals and health systems have trouble sharing electronic data between departments, let alone figuring out how to share it with physician offices, other hospitals, health plans, or even with patients. But our respondents said they expect to be ready when the new rules go into effect. Most (63 percent) of health plan respondents and nearly half (43 percent) of health system leaders say they plan to use the compliance requirements as part of their broader strategy around interoperability. Many of them intend to use the proposed rules as a foundation for their broader strategic interoperability initiatives.
The anticipated regs—combined with new payment models such as the Trusted Exchange Framework and Common Agreement (TEFCA) and a recent executive order on cost transparency—could drive hospitals and the entire health sector toward widespread interoperability. Organizations that develop and implement a strategic approach to interoperability are likely to have a competitive advantage with insights, affordability, and consumer engagement.
Hospitals might need to adjust to having fewer inpatients
Over the past several years, many hospitals and health systems have been seeing fewer inpatient visits as more patients turn to lower-cost outpatient facilities for surgical procedures. Between 1995 and 2016, aggregate hospital revenue from outpatient services grew from 30 percent to 47 percent, according to research we published last year.
While hospital inpatient stays fell 6.6 percent, visits to outpatient facilities increased 14 percent, according to Deloitte research. This change occurred despite population growth and demographic shifts (such as an increasingly older and sicker Medicare population). Some of this shift has been driven by patient preference and clinical and technological advances such as minimally invasive surgical procedures and new anesthesia techniques that reduce complications and allow patients to return home sooner.
Not only do we expect patient volume will continue to decline, hospitals and health systems of the future will have a strong financial incentive to keep patients from being admitted. Revenue will likely be generated by healthy patients who never step foot in the hospital. In response, hospitals will likely place greater emphasis on health and well-being. Twenty years from now, we anticipate that most hospitals will have fewer beds and fewer in-patient surgical suites than they do today. Hospitals, clinicians and health plans will work collectively and holistically with each other (and with the patients themselves) to ensure health and well-being.
How should hospitals prepare for the future of health?
Intellectually, most everyone agrees that we should pay closer attention to wellness and prevention. But there has not been much of a financial incentive tied to helping patients avoid services. Hospitals have been successful under the fee-for-service (FFS) model—due in part to a growing population. However, payments for value are taking hold and are strongly supported by HHS and US Centers for Medicare and Medicaid Services (CMS). Focusing on value (or prevention and wellness) along with radically interoperable data will be important for the future of heath.
When I meet with hospital executives, the transition from inpatient services to outpatient facilities, virtual interactions, and hospitals without beds are regular topics of discussion. Some hospitals are already making strategic decisions based on where the industry might be 10 or 20 years from now. Some are investing in outpatient buildings, rather than building new hospital towers. While new hospitals are being built, it is usually with fewer beds than we would have seen a few years ago.
The imminent interoperability regs could be a critical component in the future of health. Artificial intelligence (AI), robotic process automation, and other emerging technologies could allow health plans to sift through massive volumes of claims data, electronic health records, and information generated by fitness apps and wearable devices. The combination of health systems, health plans, and patients can create a three-legged stool of health insight. By working closely with clinicians, health plans might be able to direct members to early preventive measures that help them avoid illness.
If the future of health follows the trajectory that we envision, the incidence of illness will shrink, although the need for care will never completely disappear regardless of how much emphasis we place on prevention and early detection. But in the future, health care will likely only be needed when other components of the health system fail.
In the News
Virtual care will likely play a larger role in 2020 employee benefits
For the 2020 plan year, large employers and their workers will spend an average of $15,375 (per employee) in premiums and out-of-pocket costs—up 5 percent from 2019—according to estimates from the National Business Group on Health (NBGH). To help counter rising costs, large employers are growing increasingly interested in incorporating virtual health into their employee benefits, according to NBGH’s annual report on health care strategy and employee benefits. More than half of surveyed employers expect virtual care to have a significant impact on health coverage in the future, and 13 percent said it will “revolutionize” the way care is delivered. Virtual care solutions can include behavioral health, physical therapy, digital coaching, and medical-decision support. While nearly all surveyed employers said they already offer telehealth services for minor acute services, 55 percent are either including virtual primary care services in their 2020 benefits or are considering including it in the next year or two. Deloitte's 2018 consumer survey found that 77 percent of people who have tried a virtual visit were highly satisfied with the experience.
Other key themes included in the NBGH report:
- Health as a workplace strategy: More than one-third of employers said investments in health and well-being are integral to their workforce strategy—up from 27 percent a year ago. Just 15 percent of employers said their health care strategy is viewed separately from their overall workforce strategy.
- Expanded Medicare: Most employers agree that making Medicare available to everyone would lead to higher health care costs, more taxes, and could negatively affect care quality and innovation. However, more than half of employers said Medicare should be expanded to people who are younger than 65, although they disagreed on how young beneficiaries should be.
- Social determinants of health: Most employers are incorporating social determinants of health into their employee benefits. For the 2020 plan year, 90 percent of employers said a financial-wellness benefit would be included, and 85 percent are considering ways to ensure that employees have adequate housing.
- Value-based care: Nearly one-third of employers said they will roll out plans that include either accountable care organizations (ACOs) or high-performance networks (HPNs) in select markets in 2020—either directly or through a health plan—and 60 percent expect to incorporate a value-based care strategy by 2022.
The NBGH’s 2020 Large Employer’s Health Care Strategy and Plan Design Survey is based on survey responses from 147 large employers representing a wide range of industries—from aerospace to health care and life sciences—that cover more than 15 million lives.
(Source: National Business Group on Health, August 13, 2019)
Most Part D rebates negotiated by PBMs are passed onto plan sponsors, GAO finds
Most pharmacy benefit managers (PBMs) kept only about 1 percent of the rebates they negotiated for Medicare Part D plans in 2016, according to a recent Government Accountability Office (GAO) analysis. Most rebate dollars were passed on to plan sponsors, who in turn used the savings to control costs for patients, GAO determined.
Most Part D plans (74 percent) use PBMs to help control drug costs. The analysis indicates that PBMs negotiated higher rebates and price concessions under Part D in 2016 than in previous years. According to the report:
- Gross expenses increased by 20 percent—to $145.1 billion—between 2014 and 2016.
- Rebates and other price concessions increased by 66 percent to $29 billion.
- Net expenses (gross expenditures without rebates and other price concessions) increased by 13 percent to $116.1 billion.
GAO also looked at how most PBMs generate revenue. In addition to keeping a small percentage of the rebates, PBMs typically charge Part D plans volume-based fees and/or per-member, per-month fees. Many PBMs also require pharmacies to pay fees after patients purchase drugs.
RELATED: As noted in our recent blog, the ability to design formularies and negotiate rebates is a core value proposition for many PBMs. Industry observers have debated whether drug prices are artificially high because of the rebate system, or whether this system helps to bring drug prices down. Notably, the GAO analysis only looked at rebates paid under Medicare Part D—it did not include rebates in the commercial insurance sector.
New report analyzes prescription drug use among adults in the US and Canada
The US Centers for Disease Control and Prevention (CDC) has released a report on prescription drug use among adults (aged 40-79) in the US and Canada. According to the report, which incorporates data from the National Health and Nutrition Examination Survey (NHANES) and the Canadian Health Measures Survey (CHMS):
- Nearly 70 percent of US adults used one or more prescription drugs during a 30-day period and 22.4 percent used five or more drugs. Among Canadian adults, 66.5 percent used one or more prescription drugs during a 30-day period, and 18.8 percent used five or more.
- Women tend to use more drugs than men. In the US, 72.4 percent of women and 65.2 percent of men used one or more drugs in 30 days, compared to 69.3 percent of women and 61.7 percent of men in Canada. In the US, 23.5 percent of women and 21.1 percent of men used five or more prescription drugs within 30 days, compared to 19.5 percent of women and 18.1 percent of men in Canada.
- In both the US and Canada, slightly more than 83 percent of older adults (aged 60-79) used one or more prescription drugs during a 30-day period, compared to 59.5 percent of US adults and 53.3 percent of Canadian adults aged 40-59. In the US, 34.5 percent of these younger adults used five or more drugs compared to 14.5 percent in Canada.
- Antidepressants were the most commonly used drugs among US adults aged 40-59. Among Canadian adults in the same age bracket, analgesics (for pain relief) were the most frequently used drugs. In both the US and Canada, the most commonly used drugs among adults aged 60-79 were lipid-lowering medications.
(Source: CDC, National Center for Health Statistics (NCHS), Prescription Drug Use Among Adults Aged 40–79 in the United States and Canada, August 2019)
Inpatient facilities are using more telehealth, but outpatient adoption remains slow
A growing number of hospitals and health systems are adding telehealth services, according to two reports published on August 6 by data analytics firm Definitive Healthcare. While telehealth adoption among hospitals and health systems rose from 54 percent in 2014 to 85 percent in 2019, adoption has been slower in the outpatient setting. Definitive Healthcare’s fifth annual inpatient telehealth study, which is based on responses from 175 leaders in health systems, found:
- In 2019, 70 percent of health systems reported using two-way video or web-camera technology between patients and physicians—up from 47 percent in 2016.
- Among respondents, adoption of population-management tools rose from 12 percent in 2016 to 19 percent in 2019, and adoption of remote-patient monitoring through clinical-grade devices rose from 8 percent to 14 percent during the same period.
- 23 percent of respondents reported using mobile applications for concierge services in 2019, up from 17 percent in 2016.
The second report, which was based on survey results from 270 physicians and administrators in outpatient facilities, showed that adoption of telehealth tools has been slower in the outpatient setting. About 13 percent of practice leaders cited uncertainty about reimbursement policies, including those from health plans, as a barrier to adoption of telehealth services, according to the report. The report on outpatient facilities also found that:
- Overall adoption of telehealth services remained at 44 percent from 2018 to 2019.
- About 55 percent of hospital-owned practices have adopted telehealth tools, compared to 37 percent of non-hospital owned practices.
- Use of two-way video and web camera technology between patients and physicians grew from 45 percent in 2018 to 68 percent in 2019, among physician practices, health clinics, and ambulatory-surgery centers (ASCs).
(Source: Definitive Healthcare, Inpatient Telehealth Adoption on the Rise, August 6, 2019; Definitive Healthcare, 2019 Outpatient Telehealth Adoption Remains Flat, August 6, 2019)
For the first time, task force recommends screening adults for drug use
On August 13, the US Preventive Services Task Force released a draft recommendation urging primary-care physicians to screen adults for both illicit and prescription-drug use. Drug testing, however, is not part of the task force’s recommendation. According to the task force, which advises the federal government and whose recommendations influence benefit coverage for health plans, there is enough evidence to determine with “moderate certainty” that screening adults for illicit substance use would benefit patient health. The task force defines “screening” as a physician asking a patient a series of questions, the answers to which could determine if a person should be offered support services.
According to the American Academy of Family Physicians (AAFP), referral toward patient resources, such as medical-assisted treatment (MAT) and behavioral health services, could help address the national opioid crisis. These recommendations are not mandatory for physicians, but they would be considered preventative services and covered without copayment, as required by the Affordable Care Act (ACA). The task force will accept public comments through September 9.
(Source: Screening for Illicit Drug Use, Including Nonmedical Use of Prescription Drugs: An Updated Systematic Review for the U.S. Preventive Services Task Force, August 2019)
More patients are seeing surprise bills for in-network care
Surprise medical bills are becoming more common among privately insured patients, according to an August 12 study published in the American Medical Association’s (AMA) internal medicine journal. The study, which focused primarily on hospital emergency department (ED) use and inpatient admissions between 2010 and 2016, collected data from 14 million ED visits and five million inpatient admissions. Results showed that four in 10 privately insured patients received an unexpected bill from one or more out-of-network providers after receiving care, even when the hospital was in their health plan’s provider network. The study also found:
- The average cost of a surprise bill rose from $220 to $628 for ED visits, and from $804 to $2,040 for inpatient admissions.
- The number of services resulting in a surprise bill rose from 32.8 percent to 42.8 percent for ED visits, and from 26 percent to 42 percent for inpatient admissions.
- The most common source of surprise bills came from ambulance services, with 86 percent of patients receiving an out-of-network bill after using this service.
The cost to patients from surprise medical bills has prompted both Congress and 25 states to draft proposed legislation (see the June 25, 2019 Health Care Current).
(Source: The Hill, Study: 4 in 10 patients faced surprise bills in 2016 after visiting in-network hospitals, August 12, 2019)
How technology can help Medicaid overcome challenges
States face different challenges in their quest to improve beneficiary experiences and health outcomes in Medicaid. This summer, the California Health Care Foundation hosted a series of roundtables with Medicaid stakeholders across the country to identify common challenges and potential solutions. Medicaid officials, entrepreneurs, payers, and investors decided to focus on four major challenges: member engagement, data actionability, data exchange, and workforce capacity. During the roundtables, participants discussed the common tools and priorities across various Medicaid programs that could address those challenges.
Reaching and engaging members—particularly those who are transient and/or might have challenges navigating the health care system—is a persistent challenge for Medicaid programs. Almost 75 million people are enrolled in Medicaid nationwide, and many of them live at or below the federal poverty level (FPL). While most adult Medicaid members own smartphones, studies have shown that Medicaid recipients and other traditionally disadvantaged populations tend to be overlooked by new technology.
One solution discussed during the roundtables would take advantage of smartphones and other mobile devices that beneficiaries often have in their pockets. Texting, telehealth, or apps could increase member engagement by making it easier for beneficiaries to access transportation, care delivery, and educational opportunities.
Roundtable participants also raised the issue of making data useful and helpful in prompting people to take action. As more health data is generated and collected, some Medicaid providers struggle with finding useful information in a vast sea of data. Platforms that can identify the most useful data and aggregate the information in way that is both useful for clinicians and customized to the Medicaid population could help solve that problem. That could mean integrating other sources of non-health information to help identify gaps in care and barriers to access. Participants also discussed the challenges of interoperability and data exchange, especially when trying to integrate clinical data with information related to social needs. A 2017 Deloitte study showed that health systems grapple with this challenge as well. Although a third of respondents said they had social needs data (such as data around housing instability, food insecurity, social isolation, and transportation barriers, to name a few) in the electronic medical record, this is often buried in clinical notes, which can be hard to access. Technology companies might be able to help extract this information to help stakeholders design strategies to connect people to resources.
Another common challenge highlighted by the participants is workforce capacity or using technology to bolster existing resources and staff. That can include both enhancing the skills of the existing workforce, as well as equipping non-clinicians with tools they need to provide evidence-based care. The participants concluded that technology vendors that are looking to enter the Medicaid space should be prepared to collaborate and work with stakeholders to tailor solutions to existing workflows instead of expecting them to start from scratch.
RELATED: The Deloitte 2018 Survey of US Health Care Consumers explores how states and Medicaid health plans might integrate digital strategies into their outreach and engagement initiatives with the Medicaid population. It found that most adult Medicaid beneficiaries own mobile technologies. They use their devices for a variety of health purposes and are interested in trying new digital health applications in the future. Adult Medicaid beneficiaries differ from people who have private insurance in important ways: Medicaid members generally have lower incomes, fewer years of formal education, and are more likely to have social needs related to unstable housing, employment, and food security. However, when it comes to the adoption of digital technology, such as smartphones and tablets, the survey shows that the Medicaid population looks like other groups. Eighty-six percent of adult Medicaid beneficiaries own smartphones, and 69 percent own tablets, which nearly mirrors the general adult US population. While 29 percent of Medicaid beneficiaries report owning wearables, the rate is lower than that of the general population (39 percent).
(Source: Kevin Truong, What common Medicaid challenges can technology help overcome? Medcity News, August 1, 2019)